uNDERSTANDING FINANCIAL POWER OF ATTORNEY

By Jeanne St. Onge

FINANCIAL POWER OF ATTORNEY
A Financial Power of Attorney (POA) is defined as ‘a legal document giving one person (the agent or attorney-in-fact) the power to act on behalf of another person (the principal)’.
 
WHAT DOES THAT MEAN?
Essentially, this means legally granting someone the authority to make financial decisions for you, as if they were you.  
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Having a Financial POA means you (the principal) have given permission/power to someone (the agent) to make decisions for you. These decisions can include signing checks, making deposits, paying bills, selling property, buying insurance, filing taxes, and any other business you would normally be able to do.

ARE ALL POWERS OF ATTORNEY THE SAME?
No, there are several different types of POAs that can be used for several different reasons, purposes, or lengths of time.
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MOST COMMON FINANCIAL POWERS OF ATTORNEY (POA)
Remember: Agent = your chosen ‘attorney-in-fact’
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1.    Durable Financial Power of Attorney

• Your agent will have either a general or limited power of attorney. This is effective immediately, and will remain in effect after you become incapacitated
• May be revoked while you have capacity
• Ceases upon your passing

 
2.    Springing Financial Power of Attorney

• Your agent will act on your behalf only if you become incapacitated
• Effective upon your becoming incapacitated
• May be revoked while you have capacity
• Ceases upon your passing

 3.    General Financial Power of Attorney

• Your agent has broad power to make almost every decision on your behalf, or as specified in the document
• May be revoked while you have capacity
• Ceases upon your incapacitation or on your passing

 
4.    Special or Limited Financial Power of Attorney

• Your agent is given parameters of his/her power over specific matters or events
• May be restricted to a specific period of time
• May be revoked will you have capacity
• Ceases upon your passing ​

WHEN WOULD I NEED A FINANCIAL POWER OF ATTORNEY (POA)?
If you become ill or incapacitated without a valid Financial POA, there is no one to handle your financial affairs.  This means your spouse and/or family member would have to go to Probate Court to apply for conservatorship over you.   The court would deliberate and appoint someone on your behalf, also known as a conservator. If you do not have a valid Financial POA, the court may appoint a family member or could appoint a stranger to handle your finances. 

Setting up a Financial POA ahead of time ensures that you have chosen someone you trust to help you with your money.  For this reason, it is best to have a Financial POA in place before an accident or illness occurs.
 
CHOOSING YOUR FINANCIAL POWER OF ATTORNEY (POA) AGENT
Your agent should put your interests before their own when making decisions, which is why it is especially important to choose someone you trust. It is wise to choose someone who is reliable, dependable, and capable of handling your affairs on your behalf, without abusing the powers granted to him or her.
 
I NEED A FINANCIAL POWER OF ATTORNEY (POA), NOW WHAT?
Please feel free to call us at Bassett Murray Law Group (734) 930-9200 and set up an appointment to meet with one of our Attorneys, Jane Bassett or Amanda Murray.
 
I ALREADY HAVE A FINANCIAL POWER OF ATTORNEY (POA)
If you already have a Financial POA, make sure to review and update it periodically (at least once every 3-5 years). It is important to keep this document updated, especially if you have recently had any big life changes (married/divorced, recent medical diagnosis, etc.).

Download a copy of Understanding Financial Power of Attorney ​(as seen above)

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